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TMI Blog2020 (4) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... l also grant reasonable opportunity of being heard to the assessee in accordance with set principles of natural justice. Addition u/s 14A r.w.r. 8D - Computing of disallowance - computation of the average investments - HELD THAT:- Considering the above submissions of the assessee, on one side and the order of the Tribunal in the case of Quick Heal Technologies Ltd. [ 2019 (3) TMI 699 - ITAT PUNE] on the other, we find the issue now stands covered in favour of the assessee i.e. only the dividend yielded investments should be considered for computation of average investments. X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal with the grounds extracted above. 6. After hearing both the sides, I find it is the case of the assessee that an amount of ₹ 38,25,000/- was surrendered as a part of the gross disclosure during the search action u/s 132 of the Act on 21.06.2011 on Serum group of company. The present assessee belongs to said group of cases. In response to the said surrendered of undisclosed income, in view of the incriminating paper, a sum of ₹ 38,25,000/- is offered and included in the return of income filed by the assessee for the assessment year 2010- 11. Referring to the revised computation of income which is placed at page 17 of the Paper Book, ld. Counsel for the assessee brought our attention to the same and read out that Item No.4 reflects the income from the business disclosed u/s 132 of the Act amounting to ₹ 38,25,000/-. Explaining the same, ld. Counsel mentioned that ₹ 38,25,000/- was offered as a 'business income' of the assessee. However, in the reassessment, the said amount of ₹ 38,25,000/- was segregated by the Assessing Officer and treated the same as 'income from other sources'. The Assessing Officer treated the said additional income as "income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the CIT(A). Regarding the additional income of ₹ 38,25,000/-, the payment in cash to Shri Jayprakash Ghule for the purchase of land, we find the same has the support of an evidence gathered during the search action. The land transaction and cash transaction is between the assessee and Shri Ghule. We have also examined the contents of page 85 of the Paper Book which is brought our attention by ld. Counsel for the assessee and find the said page is handwritten letter by Vivek Pradhan relating to sale deed for land purchased from Shri Jay Prakash Ghule. The contents of page 85 only shows the cost about the settlement of the disputed property between the parties and the procedure is also for bringing them for signatures and registration etc. The requirement of payment of an amount of cash was also discussed in the said letter. However, there is no whisper about the "sources of income" and the nature of income in the hands of the assessee. Further, no names of companies whatsoever are discussed. The letter contained only the names of the persons involved in the whole transaction of purchase of land. The organization they represent is a matter of imagination. We also exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the assessee and mentioned that, out of the total investment of ₹ 2,16,23,585/-, the dividend was earned of ₹ 1,80,000/- in the year under consideration only on account of investments of unlisted securities, where the average investments is ₹ 12,00,000/-. Further, referring to the investments in unlisted securities of ₹ 2,03,98,858/-, ld. Counsel mentioned that no dividend income is earned by the assessee out of the same. Relying on the order of the Delhi Bench of the Tribunal in the case of ACIT vs. Vireet Investment (P) Ltd., 82 taxmann.com 415 and the decision of the Pune Bench of the Tribunal in the case of Quick Heal Technologies Ltd. vide ITA No.1500 & 1710/PUN/2017 dated 12.03.2019, ld. Counsel for the assessee submitted that these decisions are relevant for the proposition for computation of the average investments only the dividend yielded investments needs to be considered. 13. The ld. DR for the Revenue relied on the orders of the Assessing Officer and the CIT(A) on this issue. 14. On hearing both the sides, we find relevant to extract the contents of the assessee as given at page 21 and 22 of the Paper Book and the same are extracted hereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he thrust of the additional grounds, as pressed by the ld. AR, is on the exclusion of the investments in both shares and dividends which did not yield any exempt income. Following the view taken hereinabove for the A.Y. 2012-13, we set aside the impugned order and direct the A.O. to re-compute the disallowance under Rule 8D(2)(iii) by considering only such investments in calculating the average value of investments in shares and debentures which have yielded exempt income during the year. Needless to say, the assessee will be allowed an opportunity of hearing in this regard." 16. Considering the above submissions of the assessee, on one side and the order of the Tribunal in the case of Quick Heal Technologies Ltd. (supra), on the other, we find the issue now stands covered in favour of the assessee i.e. only the dividend yielded investments should be considered for computation of average investments. Considering the same, we are of the opinion that the alternate ground no.1 raised by the assessee has to be allowed. Accordingly, we order. Thus, the alternate ground no.1 raised by the assessee is allowed. 17. In the result, the appeal of the assessee is partly allowed. Order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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